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Microsoft journeys into travel service

Microsoft Corp. is developing a travel service that will let consumers book flight, hotel and car reservations over the Internet in a move that challenges travel agencies.

Microsoft's service, called Expedia, will offer information on 30,000 hotels, airlines and rental car companies when it is unveiled in October. It will let consumers and businesses make travel arrangements themselves, bypassing travel agents.

Yet some travel agents say despite increased competition from the Internet, they're not overly concerned about losing business.

"What we've been hearing is that Internet services are time consuming," said Liz Lees, manager of Anita Travel in St. Petersburg. "Most people don't want to spend that much time to save a small amount of money."

Lees, whose travel agency specializes in complicated trips, said individuals planning elaborate vacations may want to use travel agents with experience.

The American Society of Travel Agents does not view Internet services as a threat to travel agents' business, said Steve Loucks, spokesman for the trade group.

In fact, Loucks said that technological advances have actually helped the industry. More information is now available to travelers, he said, but consumers need help sorting through it all. And travelers can also locate and communicate with local agencies over the Internet.

"Nothing can replace the human touch," Loucks said.

"Just because you can pick up the scissors and cut your own hair doesn't mean you're going to do it," he said. "Just because you can pick up a wrench doesn't mean you're not going to take your car to a mechanic."

Expedia is another step by Microsoft into Internet services, a market it sees as a key to its success on the global computer network. Microsoft CarPoint, for example, already provides pricing, fuel and other information on most of models of new cars and trucks sold in the United States.

"This is yet another move by Microsoft into the content business," said Ted Julian, an analyst at International Data Corp., a market researcher.

Microsoft is using information provided by Worldspan, a group of airlines that includes Northwest Airlines Corp., Trans World Airlines Inc. and Delta Air Lines Inc. The service is slated to be free on MSN, Microsoft's Internet-based online service.

In addition to Expedia, Microsoft announced Monday it also has formed an alliance with American Express to develop an online program for corporate travelers. The corporate program will allow business travelers to find the travel rates available, according to Microsoft. That product should be available by mid-1997.

Consumers using Expedia won't see lower prices, even though the service eliminates travel agents. Microsoft plans to pass the cost savings the electronic service generates to hotels, airlines and car-rental companies and vendors.

"Lower costs aren't getting translated into lower prices for consumers and that's a mistake," said Bill Bass, an analyst at Forrester Research Inc., a market researcher.

Electronic services similar to Expedia already are available on the Internet and online services, including Travelocity and Internet Travel Network, or ITN.

Travelocity, unveiled in March, offers information on about 700 airlines and lets customers reserve and purchase tickets for 380 airlines. The service, which appears on the Internet, America Online Inc. and CompuServe Corp., also offers electronic discussions, a map service, and travel guides.

In September, Travelocity plans to start taking reservations for 50 car and 30,000 hotel chains. Travelocity is owned by AMR Corp.'s Sabre Group and Worldview Systems Corp., a joint venture between Advance Publications Inc.'s Random House and Ameritech Corp. that provides entertainment guides.

Despite programs like Travelocity, airline ticket sales through travel agents are up 4 percent this year, said Loucks of the travel agent group.

"People who say travel agents are losing ground don't know what they're talking about," he said. "As long as travel agents continue to look out for their client's best interests they have no reason to worry."

_ Times correspondent Lindsay Oldenski contributed to this report.